Tackling ‘corrosive’ welfare

Dr Luke Buckmaster and Michael Klapdor, Social Policy
Section

Can reforms to the way welfare is delivered change individual
behaviour in a meaningful way?

While Australia’s income support system is primarily aimed
at alleviating disadvantage, a number of recent welfare reforms
have focused on the potential role welfare has in sustaining or
even causing disadvantage. This reflects an emerging policy
consensus on the need for governments to address the negative
effects of welfare dependency, including engaging in active
interventions in the lives of welfare recipients.

Concern that welfare has a ‘corrosive’ or
‘corrupting’ influence on its recipients has been a
feature of welfare policy debates throughout Australia’s
history. This concern has contributed to a policy focus on targeted
income support payments to those most in need. Recent debate has
shifted from participation requirements and the means tested
conditions of entitlement. It now centres on the living conditions
of those being targeted and whether the behaviour of welfare
recipients is contributing to their disadvantage.

Income management (or ‘welfare quarantining’),
under which a portion of a recipient’s payments is set aside
for ‘priority needs’, such as food, rent and utilities.
This measure was introduced by the Howard Government as part of the
Northern Territory Emergency Response in 2006 and was expanded
under the Rudd-Gillard Government.

The School Enrolment and Attendance through Welfare Reform
Measure, which uses case management and the threat of payment
suspension/cancellation to encourage parents to enrol their
children in school and take steps to ensure attendance.

The Labor Party’s election commitment to require children
of income support recipients to undergo health checks before their
parents can receive an end of year Family Tax Benefit A
supplement.

The stated purpose of these measures is to address the health
and welfare needs of children living in families dependent on
income support. A further purpose is to encourage people to move
from ‘passive welfare’ to participation in employment
and/or education.

Australia is not alone in implementing behavioural conditions
for welfare recipients. A number of states in the United States and
developing countries in Central America have introduced systems to
encourage certain kinds of behaviour, including child immunisations
and increased school enrolments. The Australian approach differs
markedly in the extent to which intervention occurs in welfare
recipients’ lives.

Few dispute that the lives of many families dependent on income
support could be improved by ensuring income is allocated towards
necessities and spending on alcohol, drugs and gambling reduced.
However, critics have highlighted a range of concerns with recent
policy in this area. Evidence as to the effectiveness of these
policies is limited, administrative costs are high and a question
persists as to whether it is possible to encourage people to take
responsibility for themselves if they do not have control over
important aspects of their lives. Some critics have also argued
that targeting personal behaviour by withholding income payments is
inconsistent with the rights-based approach to income support that
has been a feature of welfare policy in Australia since World War
II.

A further issue is that the main objectives of this more
paternalist approach to welfare—ameliorating the detrimental
effects of welfare and encouraging participation—may not
always be complementary. For example, it could be that income
management simply helps individuals to manage their livelihoods as
‘passive’ welfare recipients better. Addressing both
objectives will most likely require reforms to welfare payment
delivery to be coordinated with other policies addressing
disadvantage, employment participation and opportunity, as well as
access to services; that is, policies aimed at the non-behavioural
factors affecting the lives of ‘at-risk’ welfare
recipients.

Both Labor and the Coalition have expressed commitment to
addressing long-term welfare dependency, and for this to be
achieved through greater government control over the spending of
income support recipients. The push for income management to become
a mainstream approach to welfare delivery, and for further reforms
to the social security system in terms of conditionality, raise a
number of questions for the new parliament to address:

What evidence will be required to evaluate whether the new
approach to welfare has been a success?

What, if any, limits ought there to be on the nature and extent
of interventions in the lives of welfare recipients?

To what extent can these reforms deliver enduring changes to
the behaviour of individuals and to the lives of those in
disadvantaged communities in Australia?

New Income Management

commenced July 2010

will affect 20 000 people in the Northern Territory including
disengaged youth and long-term welfare recipients

to cost $350 million over four years plus $53 million for
support services.

Cape York project

welfare reform trial in four communities

welfare recipients are referred to a Family Responsibilities
Commission (FRC) for anti-social behaviour, criminal activity or if
their children fail to attend school

FRC can impose income management and compel individuals to
attend support services.

WA pilot

child protection/income management trial in Perth and the
Kimberley

more than 200 hundred families have volunteered for income
management

more than 60 families placed on income management as a result
of a referral from state child protection. authorities.